Google Cloud just waived data transfer fees for customers, and took a big swipe at Microsoft in the process

Changes to Google Cloud data transfer practices have been unveiled that will see customers able to migrate data to another provider free of charge, and the move is “squarely targeted at Microsoft”, analysts have told ITPro. 

Cloud customers have typically been required to pay when migrating data to different providers. It’s a policy that has been criticized by some industry experts due to the fact that it can be highly restrictive and costly, with prices based on the volume of data being transferred.

In an announcement this week, Amit Zavery, GM/VP and head of platform for Google Cloud, revealed free migration services will apply to all customers globally, enabling them to switch providers without cumbersome fees.

“Starting today, Google Cloud customers who wish to stop using Google Cloud and migrate their data to another cloud provider and/or on premises, can take advantage of free network data transfer to migrate their data out of Google Cloud,” he said. “This applies to all customers globally.”

The cloud giant said the new policy will improve convenience for customers and offer them a greater degree of flexibility when opting to choose an alternative provider.

“Eliminating data transfer fees for switching cloud providers will make it easier for customers to change their cloud provider; however, it does not solve the fundamental issue that prevents many customers from working with their preferred cloud provider in the first place: restrictive and unfair licensing practices."

Google Cloud move “squarely targeted at Microsoft”

Google’s mention of “unfair licensing practices” represents a clear swipe at competitors in the cloud computing space, particularly Microsoft, according to Sid Nag, VP for cloud services & technologies at Gartner Research.

In December 2023, Google Cloud and Amazon Web Services (AWS) both criticized Microsoft’s licensing practices and the negative impact they have on UK cloud customers.

In a letter to the UK’s Competition and Markets Authority (CMA), Google initially claimed that Microsoft’s licensing regime means customers are discouraged from using competitor services, even as a secondary provider alongside its own offerings.

AWS rubbed further salt in the wound with a follow-up statement to the CMA just days later, stating that the tech giant’s policies make it “financially unviable” for customers to choose a provider other than Microsoft.

Nag told ITPro the broadside is “squarely targeted at Microsoft” and the intention could be to curry favor with regulators amidst ongoing scrutiny over customer choice in both the UK and European Union (EU).

“From my perspective, the biggest issue according to them [Google Cloud] is related to licensing fees by Microsoft to run their software, or other plans,” he said. “I think that’s the real reason Google is doing this.”

“They want to raise this as an issue. I think they're essentially trying to point out Microsoft's anti licensing practices and things of that nature,” Nag added “Regulators [in Europe] believe that there needs to be freedom of choice, so at a high level, that's really what's going on here.”

The criticism from both firms coincided with an investigation by the CMA into the state of competition in the country’s cloud computing market.

Data transfer fees, also known as ‘egress fees’, have been a key talking point for regulators in the UK over the last year, with a preliminary investigation from Ofcom pinpointing the practice as having a damaging effect on customer flexibility.

The costly process of transferring data from one provider to another has a negative impact on customers’ ability to switch providers, regulators believe, or pursue a multi-cloud approach whereby they use several separate providers.

Multi-cloud firms won’t reap the rewards of this change

While Google Cloud appears to be framing its policy change as a holistic move to improve customer flexibility and choice, there is a distinct caveat at play here, according to Nag. 

Customers won’t be charged for leaving Google Cloud entirely, but for those seeking to migrate data to other providers, charges will still apply. This, he noted, still places GCP customers pursuing a multi-cloud strategy in a precarious position in which they will still be lumbered with fees for data migration.

Research from Gartner shows that multi-cloud approaches have gathered pace in recent years amidst a heightened focus on flexibility among enterprises. The recent changes from Google, therefore, may not be quite as impactful and beneficial to those exploring multi-cloud options.

“If I’m using a multi-cloud architecture, including instances where I’m using a particular capability from a secondary or tertiary cloud provider that may need access to the data sitting in the primary provider’s estate, then what happens? It doesn’t apply,” said Nag.